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Cash Market Transaction Survey 2016: July 2017
Cash Market Transaction Survey 2016: July 2017
July 2017
KEY FINDINGS
The Cash Market Transaction Survey (“CMTS”) has been conducted annually since 1991 to study
the trading composition of the Exchange Participants (“EPs”) of the Stock Exchange of Hong Kong
Limited (“SEHK”). The main objective is to understand the relative contribution of trading value in
the HKEX securities market, including the Main Board and the Growth Enterprise Market (“GEM”),
by investor type. The market share of online trading is also assessed.
The 2016 survey covered EPs’ transactions on both the Main Board and GEM from January to
December 2016 (referred to as 2016 study period)1. The survey included Southbound trading
through the specialised EPs designated for Shanghai-Hong Kong Stock Connect (launched in 2014)
and Shenzhen-Hong Kong Stock Connect launched on 5 December 2016 (collectively referred to
as the “Stock Connect” scheme) in the data analysis as trading originated from investors in
Mainland China. The designated EPs for the Stock Connect scheme are referred to as the
“Southbound EPs”.
(1) In 2016, local (Hong Kong) investors’ contribution to total market turnover decreased to 36%
(from 39% in 2014/15).
(2) In 2016, overseas investors’ contribution to the total market turnover was 40%, close to the
39% in 2014/15.
(3) Overseas investor trading came mainly from institutions - 33% of the total market turnover
(31% in 2014/15) compared to 7% from overseas retail investors (8% in 2014/15).
1
Previous surveys covered an annual period from October in a year to September in the following year. The previous survey covered
the period from October 2014 to September 2015 (referred to as the 2014/15 study period, similarly for prior surveys).
(5) Institutional investors (local and overseas) contributed 53% to total market turnover in 2016
(51% in 2014/15). Retail investors’ contribution (local and overseas) decreased to 23% from
27% in 2014/15.
(6) The majority of investor trading activities from the US, UK, Continental Europe and Australia
(at least 88% or more) and Singapore (at least 79% or more) were contributed by institutional
investors. In contrast, a significant proportion of trading from Mainland China came from retail
investors (at least 62%).
(7) In terms of implied value of trading2, overseas retail investor trading declined by 46% in 2016
compared to 2014/15, mainly due to the decrease in investor trading from Mainland China
(largely contributed by retail investors).
(8) The contribution of EP principal trading in 2016 further increased to a new record high of 24%
(22% in 2014/15). In terms of implied value of trading, EP principal trading declined by 33%
in 2016 compared to 2014/15. Over the past ten years3, EP principal trading grew at a
compound annual growth rate (“CAGR”) of 22%, which was the highest among all types of
trading.
(9) In 2016, UK investors continued as the largest contributor group, with a contribution of 23% of
overseas investor trading and 9% of total market turnover (27% and 10% respectively in
2014/15). Mainland China investors took over US to become second capturing 22% of
overseas investor trading and 9% of total market turnover, and these were about the same as
in 2014/15. US investors slipped from second to third place capturing 20% of overseas
investor trading and 8% of total market turnover (22% and 9% respectively in 2014/15).
(10) In 2016, the contribution from Continental European investors increased to 13% of overseas
investor trading (8% in 2014/15) and 5% of total market turnover (3% in 2014/15).
(11) Asian investors in aggregate contributed 36% of total overseas investor trading in 2016,
similar to the level in 2014/15 and were about the same as the contribution made by the
European investors in the year. Following Mainland China investors, Singaporean investors
were the second largest contributor group in Asia ― 8% of overseas investor trading and 3%
of total market turnover.
(12) The total implied value of overseas investor trading declined by 37% in 2016 compared to
2014/15. Trading from Mainland China investors declined by 38%, UK investors declined by
45% and US investors declined by 43%, compared to the overall market decline of 38% in
2016. In contrast, the implied trading value from Continental European investors had a
moderate growth of 10% in 2016.
2
See Glossary for definition.
3
The period refers to the annual study periods of the past ten surveys.
(14) In 2016, retail online trading accounted for 47% of total retail investor trading compared to
44% in 2014/15, and 11% of total market turnover (slightly down from 12% in 2014/15). In
2016, the implied value of online trading declined by 43% compared to 2014/15.
All trading
Investor trading 83.57 78.13 76.21
EP principal trading 16.43 21.87 23.79
100.00 100.00 100.00
Investor trading
Retail 30.40 35.16 29.89
Institutional 69.60 64.84 70.11
100.00 100.00 100.00
Investor trading
Local 53.73 49.72 47.22
Overseas 46.27 50.28 52.78
100.00 100.00 100.00
Retail investor trading
Local 80.66 70.96 69.56
Overseas 19.34 29.04 30.44
100.00 100.00 100.00
Institutional investor trading
Local 41.96 38.21 37.69
Overseas 58.04 61.79 62.31
100.00 100.00 100.00
Local investor trading
Retail 45.64 50.18 44.04
Institutional 54.36 49.82 55.96
100.00 100.00 100.00
Overseas investor trading
Retail 12.70 20.31 17.24
Institutional 87.30 79.69 82.76
100.00 100.00 100.00
2006/2016
Distribution of cash market trading by investor type (%)
cumulative
Type of trade market
turnover
(%)
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2016
EP principal trading 4.15 6.12 8.49 9.92 11.73 15.49 16.33 16.43 21.87 23.79 13.64
Overseas investor trading 43.10 41.49 41.84 46.30 46.09 46.03 45.69 38.67 39.28 40.23 42.60
Retail 3.81 3.24 4.32 4.50 4.43 3.87 4.85 4.91 7.98 6.93 5.02
Institutional 39.30 38.25 37.52 41.80 41.66 42.16 40.84 33.75 31.30 33.29 37.58
Local investor trading 52.75 52.39 49.66 43.78 42.18 38.48 37.99 44.90 38.85 35.99 43.76
Retail 27.50 25.88 25.20 21.27 22.25 17.20 17.62 20.49 19.49 15.85 21.40
Institutional 25.24 26.51 24.46 22.51 19.93 21.28 20.37 24.41 19.36 20.14 22.36
EP principal trading 80.90 110.00 -11.68 26.87 42.32 -5.78 16.69 5.97 123.59 -32.87 21.70
Overseas investor trading 144.94 36.98 -35.79 20.19 19.79 -28.74 9.92 -10.91 70.69 -36.79 -0.53
Retail 202.90 21.08 -15.04 13.06 18.57 -37.74 38.86 6.63 172.84 -46.35 7.14
Institutional 140.48 38.52 -37.54 21.01 19.92 -27.78 7.26 -12.99 55.83 -34.36 -1.59
Local investor trading 134.03 41.35 -39.65 -4.25 15.92 -34.91 9.33 24.43 45.38 -42.83 -3.93
Retail 137.13 33.93 -38.02 -8.30 25.85 -44.85 13.45 22.44 59.83 -49.83 -5.72
Institutional 130.74 49.44 -41.24 -0.07 6.54 -23.81 6.01 26.15 33.24 -35.79 -2.25
Retail investor trading 143.56 32.36 -35.46 -5.17 24.58 -43.67 18.12 19.03 81.68 -48.82 -3.24
Institutional investor trading 136.57 42.79 -39.06 12.69 15.23 -26.50 6.84 0.03 46.35 -34.90 -1.84
Total 135.68 42.31 -36.33 8.62 20.33 -28.65 10.74 5.27 68.02 -38.28 0.24
Remarks:
(1) In 2016, reported origins in “Rest of Asia” were Bangladesh, Brunei, Cambodia, India, Indonesia,
Kazakhstan, Kyrgyzstan, Laos, Macau, Malaysia, Mongolia, Nepal, Pakistan, Philippines, Sri Lanka,
South Korea, Thailand, and Vietnam (a total of 18 origins).
(2) In 2016, reported origins in “Others” included Anguilla, Bahamas, Bahrain, Belize, Bermuda, Bolivia,
Brazil, British Virgin Islands, Burkina Faso, Cameroon, Canada, Cayman Islands, Cook Islands,
Costa Rica, Cyprus, Dominica, Ecuador, Grenada, Guyana, Honduras, Israel, Jamaica, Jersey,
Kenya, Kuwait, Lebanon, Liberia, Marshall Islands, Mauritius, Mexico, Morocco, Namibia, New
Zealand, Niue, Oman, Panama, Paraguay, Peru, Qatar, Russia, Samoa, Saudi Arabia, Seychelles,
South Africa, St. Kitts & Nevis, Suriname, Trinidad & Tobago, Turkey, Turks & Caicos Islands, United
Arab Emirates, Uruguay, Vanuatu, and Venezuela (a total of 53 origins).
Remark:
4
(1) Others comprise investors from Japan, Taiwan, Rest of Asia and Rest of the World .
4
Refer to remarks of figure 6 on the previous page for the full list of countries included in the Rest of Asia and the Rest of the World.
US 0.0% 88.1%
UK 0.0% 88.4%
Notes:
(1) The minimum proportions were deduced figures from the responses. The difference between
100% and the summation of the two figures for an origin represents the proportion of trading from
that origin which could come from either retail or institutional investors.
(2) The Southbound EPs were excluded from the analysis.
US 29.19 35.13 36.31 24.37 27.75 32.27 28.07 25.65 22.48 20.12
Europe 42.12 38.51 33.84 44.81 41.23 37.41 39.22 38.10 34.22 36.42
UK 26.61 22.46 23.35 28.68 27.32 25.35 25.60 27.68 26.57 23.10
Europe
(excluding UK) 15.51 16.05 10.49 16.13 13.91 12.05 13.62 10.42 7.64 13.31
Asia 21.52 21.52 25.58 26.56 22.27 21.23 23.82 28.81 35.64 35.61
Japan 3.69 3.39 1.92 2.58 1.90 1.74 1.12 1.45 1.27 0.86
Mainland China 8.22 7.75 11.86 10.55 9.92 8.49 11.12 13.11 21.89 21.55
Taiwan 1.36 0.89 1.11 1.03 1.09 1.08 1.10 1.37 1.63 1.22
Singapore 6.63 7.55 7.69 9.28 6.63 6.97 6.40 10.37 7.61 8.31
Rest of Asia 1.63 1.94 3.00 3.11 2.73 2.95 4.09 2.51 3.24 3.67
Australia 2.85 1.81 1.60 5.47 6.15 5.35 1.65 1.09 4.08
Others 7.17 1.99 2.46 2.66 3.28 2.95 3.54 5.79 6.57 3.77
Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Notes:
(1) Australia was included in "Others" in surveys prior to 2007/08
(2) Numbers may not add up to 100% due to rounding
Notes:
(1) The implied value of trading from a particular origin is determined by first calculating the implied
overseas agency trading value during the study period of the survey, and then multiplying it by the
percentage contribution to overseas agency trading by that origin as obtained from the survey.
(2) Australia was included in "Others" in surveys prior to 2007/08.
US 174.18 64.82 -33.62 -19.36 36.41 -17.13 -4.38 -18.59 49.60 -43.43 -4.56
Europe 119.34 25.24 -43.58 59.19 10.20 -35.34 15.24 -13.45 53.30 -32.72 -2.12
UK 167.18 15.59 -33.25 47.65 14.08 -33.86 11.00 -3.69 63.89 -45.04 -2.08
Europe
(excluding
UK) 67.79 41.80 -58.04 84.86 3.29 -38.25 24.16 -31.80 25.17 10.11 -2.20
Asia 154.28 36.96 -23.67 24.78 0.47 -32.09 23.35 7.74 111.18 -36.85 5.20
Japan 171.62 25.94 -63.67 61.76 -11.63 -35.04 -29.22 15.48 49.06 -56.91 -15.35
Mainland
China 270.15 29.16 -1.67 6.89 12.57 -38.97 43.89 5.03 185.03 -37.77 10.72
Taiwan 246.84 -9.74 -20.58 12.29 26.57 -29.57 11.90 11.24 103.23 -52.76 -1.69
Singapore 81.53 55.86 -34.52 44.96 -14.36 -25.13 0.85 44.42 25.36 -31.04 1.99
Rest of
Asia 93.48 63.27 -0.93 24.78 5.08 -22.94 52.54 -45.27 120.17 -28.47 8.87
Australia -59.26 6.39 309.19 -19.83 -4.36 -72.47 12.79 136.11 13.64
Others 185.15 -61.96 -20.48 29.91 47.67 -36.05 31.90 45.86 93.71 -63.71 -7.37
Total 144.94 36.98 -35.79 20.19 19.79 -28.74 9.92 -10.91 70.69 -36.79 -0.53
Figure 10. Percentage share of retail online trading value in cash market
(2006/07 – 2016)
Online brokers
Total implied trading value (HK$million) 919,187 1,235,360 1,465,223 3,079,997 1,758,013
Notes: The Southbound EPs for Stock Connect trading were regarded as non-online brokers in the above
analysis.
Implied value of trading The implied value of trading for a particular type of trade is
calculated by multiplying the percentage contribution to
market turnover by that type of trade as obtained from the
survey by the actual overall market turnover during the study
period.
Response Rate
Response rate
Target Responded
Participant group
population sample By turnover
By number
value
5
Category A brokers 14 14 100.0% 100.0%
6
Category B brokers 49 44 89.8% 91.7%
7
Category C brokers 496 388 78.2% 97.0%
5
Category A brokers’ market share ranked from position 1 to 14, YTD December 2017.
6
Category B brokers’ market share ranked from position 15 to 65, YTD December 2017.
7
Category C brokers’ market share ranked from position beyond 65, YTD December 2017.
8
Excluding the Southbound EPs.
Agency Principal
Retail Institutional
U.S. U.K. Europe Japan Mainland China Taiwan Singapore Rest of Asia Australia Others
(excluding UK)
The target population included all trading Exchange Participants (“EPs”) of SEHK of the cash
market who became trading participants prior to the end of June 2016 (i.e. who had been in
business for over 6 full months during the study period) and remained until January 2017. It
excluded EPs whose trading was suspended from September 2016 to December 2016 or
ceased on or before December 2016 or who traded for less than 6 months during the study
period. This is to avoid distortion of the results by participants who were not in the normal
course of business.
The specialised EPs designated for Shanghai-Hong Kong Stock Connect and
Shenzhen-Hong Kong Stock Connect Southbound trading (referred to as the “Southbound
EPs”) — China Investment Information Services Limited for the former and China Innovation
Market Service Company Limited for the latter ― were excluded from the survey sample. All
of the trading recorded for these EPs was included in the subsequent data analysis as trading
from Mainland China investors.
(3) Methodology
The survey sample consisted of all EPs in the target population. Survey questionnaires were
sent to each EP firm in the sample, with close telephone/email follow-up to ensure a high
response rate. In the survey questionnaire, EPs were requested to provide an estimated
percentage breakdown of their trading value during the study period in accordance with the
prescribed classification. EPs were asked to provide their consolidated trading composition
including trading channelled through their affiliate or sister companies as far as possible, if
Each responding EP’s answers in percentage terms were weighted by the respondent’s total
turnover value in the overall market accordingly to obtain respective values in the responded
sample. The implied percentage shares of different types of trade in the market were then
calculated, adjusted by the response rate in value terms relative to the target population.
For the Southbound EPs, all trading was regarded as overseas investor trading with Mainland
China origin. As the breakdown of the Southbound trading by retail/institutional investors
was not available, the overall share of retail/institutional investor trading based on weighted
responses from the survey sample was applied to the Southbound EPs for completing the
analysis for the market. For the analysis of retail online trading, the Southbound EPs were
regarded as a non-online broker.
The implied value of trading for a particular type of trade is determined by multiplying the
percentage contribution to total turnover (of target population) by that type of trade as
obtained from the survey by the actual total turnover in the overall market during the study
period for that year of survey.
(4) Limitations
In providing the breakdown of total turnover value by the type of trade, many EPs could only
provide their best estimates instead of hard data.
EPs might not know the true origins of all their client orders. For instance, an EP might
classify transactions for a local institution as such when in fact the orders originated from
overseas and were placed through that local institution, or vice versa.
In practice, it is not unusual for EPs to convey client orders to other EPs for execution. When
providing the breakdown of their investor composition, most of the EPs would treat those EPs
who conveyed orders to them as their ultimate clients, i.e. as local institutions, regardless of
the client origin.
Some bank-related EPs might not be able to provide the trading composition of client orders
originating from their associated banks and would treat the banks as their local institutional
clients. This would also affect the result of retail online trading since part of the retail investor
trading channelled through banks would be online.
Different EPs would have different corporate group structures and operating models within
their corporate groups. Some EPs might be able to provide the investor composition of
trading channelled via their sister companies; others may regard their sister companies as
their clients and incorporated no further breakdown. In other words, the depth of detail in
investor composition across EPs might not be on the same ground.
The non-responded EPs and responded EPs with missing responses for certain questions
may have different trading composition from the other responded EPs. The exclusion of
non-responded EPs from the applicable analysis or the mean substitution method for missing
answers might generate survey results deviating from the true situation. Since the survey
has a high response rate by turnover value and a method of weighting by size group in
In the analysis, Southbound trading assumed the same ratio of retail/institutional investor
trading as that based on the overall weighted responses. However, Southbound trading from
Mainland investors may have a different retail/institutional trading ratio due to the peculiar
conditions of outward investment channels in Mainland China. Due to data unavailability of
the investor composition of Southbound trading, the current treatment is considered the
best-effort estimate. Nevertheless, the turnover value of the two designated Southbound
EPs accounted for approximately 3% of the total turnover of the overall target population
(including the Southbound EPs) in 2016.
— END —
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or employees shall be responsible for any loss or damage arising from any inaccuracy in or omission of any
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